The phenomenon of clientelism is undermining both the governance and the economic performance of the state-owned companies, spanning across a wide spectrum of often illegally or economically inefficient activities…

An important number of EU reports are emphasizing structural weaknesses among the Member States in dealing with corruption and state capture, in addition to stressing the importance of sharing best practices and knowledge…

The project aims at providing strategic analysis of the phenomenon of clientelism with regards to a very specific area: state-owned companies

The project aims at providing common indicators, tools for comparative transnational and EU approaches, data visualization tools, policy recommendation EU and national level.

In particular, the project will provide more objective corruption and state capture indicators to highlight the impact of the existing EU mechanisms for anti-corruption in certain Member States (such as the Cooperation and Verification Mechanism for Romania and Bulgaria) and propose new administrative, early warning and policy instruments to combat state capture in SOEs, in both old and new Member States.

The phenomenon of clientelism is undermining both the governance and the economic performance of the state owned companies, spanning across a wide spectrum of often illegally or economically inefficient activities.

An important number of EU reports are emphasizing structural weaknesses among Member States in dealing with corruption and state capture, in addition to stressing the importance of sharing best practices and knowledge.

Unfortunately, the application of OUG 109 as a corporate governance tool of state-owned companies in Romania was partial, with many delays, in the first years being truly competitive selections only for companies under IMF direct monitoring, nor there fully.

In this project, we look at how state-owned companies, relevant to national economies, are exposed to political clientelism. We know that in many companies the risk of corruption exists – we want to see how great it is, how visible it is, how it can be eliminated. And what is the state’s policy to combat these phenomena.

How does clientelism manifest in state-owned companies? A place to see is through the public procurement process, which it applies or does not apply. The second way a state-owned enterprise can be clientele is when it sells below the market price. And you have to look. Who sells, sells preferentially, are networks that have preferential access to these contracts? The third is simply politicization, nepotism in the organizational part.

State-owned companies have to comply with more restrictive regulations than private ones. State-owned companies are tighter controls. So their managers are getting a lot of time preparing for checks. Instead of having the flexibility to make the best business decisions, you have to be bureaucrat and avoid the controls. In these companies, the state is a hindrance to himself.

The project “State-Owned Companies – Preventing Corruption and State Capture” is financed through Economic and Financial Crime, Corruption, Environmental Crime Programme, DG Migration and Home Affairs, European Commission and co-financed by Open Society Foundation.